Over the past two years, tech giants such as Facebook, Google, and Microsoft have been brought into question over anti-trust concerns. The Apple vs. Epic case, where Epic sued Apple over its unfair App Store policies, was the straw that broke the camel’s back as it lead to several more courts around the world persecuting multinational technology conglomerates to answer to the law.
Governments and regulatory authorities have been alerted by the monopolistic behavior of these companies and, in some cases, how personal user data was being handled with leniency. The situation surrounding these big-name companies has shifted from unquestionable to scrutinized in the span of just two years and it seems like it’s not going to slow down anytime soon. .
South Korea is ready for third-party payment systems
Several courts have called in these companies and put them on the pedestal to explain their business practices. South Korea is one of those countries that launched investigations into multiple tech giants after the Apple vs. Epic case became the talk of the town. The problem with Apple in particular is their control over the App Store that acts as a monopoly around the world, vilifying small developers by taking a large cut from their sales. The same concern exists with Google, but the cherry on top with Google is privacy concerns over user data.
Last month, the bill to ban App Store (aka Apple) and Play Store (aka Google) from restricting developers to only their mandatory purchase systems was passed. This was similar to the judge’s order in the Apple vs. Epic case where the court ruled that Apple will have to lower the barriers of its App Store and allow third-party payment systems. But, Apple has appealed that decision and, likewise, they ignored this amendment for the time being, as well.
However, Reuters has just reported that Korea has strongly urged Apple and Google to explain their plans on implementing third-party payment systems by mid-October. Apple and Google don’t have a choice here where they can just refuse to comply. If they wish to oppose the bill—which they most likely will—whatever explanations they have for that need to be given to the South Korean courts by next month.
The Korea Communications Commission will soon be drawing up an enforcement ordinance that will accompany the amendment of the country’s Telecommunications Business Act. Most of the new law went into effect in mid-September.
The enforcement ordinance is expected to be drafted within six months or possibly earlier, the official said.
Time and time again, Apple has reiterated that the App Store in question is one they’ve created so they have full right to exercise ultimate control over it. Apple has said that the App Store is a safe, secure, and fair marketplace for all, and that developers prefer it because of how trusted the platform is. However, actual developers feel differently and governments are starting to sympathize with them over Apple.
What this could entail
This is obviously an enormous ask from Korea and one that will not sit right with either of the Silicon Valley giants. If approved, Apple would lose out on a ton of app sales revenue and potentially lose its efficacious grip on the market. Same thing goes for Google. The App Store is one of the major money-makers for Apple, generating over $64 billion in sales last year. So it’s safe to say, there is a very weak chance that Apple will just simply comply with the authorities and not appeal the decision.
Most developers choose to launch their apps on iOS instead of, or before, on Android. This is because the App Store is marginally more popular and contains the most amount of users targetable. Hence, a developer will reach out to as many people as possible if they release their app on iOS. So that’s what they do but then Apple’s unavoidable 30% cut comes in and ruins it all. This also applies to Android, but once, again, most developers would prefer their app to be on iOS over Android because of the user population.
Therefore, a change in policy, albeit only in Korea, can finally give developers a way to bypass Apple’s outrageous taxes and connect straight to the customer with a third-party payment system outside of the App Store. Many developers have been advocating for this in the past few years amidst growing anti-trust concerns over these companies. And, it looks like maybe the impossible change is finally here.
Apple works similarly on a global scale, meaning that their policies around the world are mostly consistent. So, a change in Korea, if it were to happen, could carry along a pervasive aftermath that would force Apple to change their rules worldwide. Various media publications reached out to Apple and Google for a comment but they did not receive any immediate replies. We will update this article accordingly if any relevant information surfaces.